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{Trust  agreement 


CANADIAN  GENERAL  ELECTRIC  COMPANY,  LIMITED 


AND 


GUARANTY  TRUST  COMPANY  OF  NEW  YORK 

AS  TRUSTEE 


Dated  April  I,  1922 


TWENTY-YEAR  GOLD  DEBENTURES 


Prloted  In  the  United  States  by  The  Evening  Post  Job  Printing  Office.  Inc.,  154  Pulton  St.,  New  York.  N.  Y. 


Digitized  by  the  Internet  Archive 
in  2017  with  funding  from 

University  of  Illinois  Urbana-Champaign  Alternates 


https://archive.org/details/trustagreementcaOOcana 


€TI)1S  Agreement  dated  the  first  day  of  April,  1922, 
between  Canadian  General  Electric  Company,  Limited, 
a  corporation  duly  organized  and  existing  under  the  laws 
of  the  Dominion  of  Canada  (hereinafter  called  the  “Com¬ 
pany”),  party  of  the  first  part,  and  Guaranty  Trust 
Company  of  New  York,  a  corporation  duly  organized 
and  existing  under  the  laws  of  the  State  of  New 
York,  United  States  of  America  (hereinafter  called  the 
“Trustee”),  party  of  the  second  part. 

Whereas,  for  its  lawful  corporate  purposes  the  Com¬ 
pany  has  duly  authorized  the  issue  of  its  Twenty-Year 
Gold  Debentures  (hereinafter  called  the  “debentures”), 
for  the  aggregate  principal  amount  of  ten  million  dollars 
($10,000,000),  to  be  dated  April  1,  1922,  to  be  payable 
April  1,  1912,  to  be  redeemable  at  the  option  of  the  Com¬ 
pany  before  maturity  as  hereinafter  provided,  and  to  be 
issued  in  series;  and 

Whereas,  the  debentures  of  Series  A  hereinafter  pro¬ 
vided  for,  the  interest  coupons  attached  thereto,  and  the 
Trustee’s  certificate  provided  to  be  executed  on  all  the 
debentures,  are  to  be  substantially  in  the  following 
form  (with  appropriate  changes  as  lo  denominations,  in¬ 
terest  rate,  redemption  price  and  minimum  amounts  (if 
any)  redeemable  at  any  one  time  in  the  case  of  debentures 
of  other  series)  : 

[form  of  debenture  of  series  a] 

No .  $1,000. 

Dominion  of  Canada 

CANADIAN  GENERAL  ELECTRIC  COMPANY, 
LIMITED. 

Twenty-Year  Gold  Debenture,  0%  Series  A. 

Canadian  General  Electric  Company,  Limited,  a 
corporation  organized  and  existing  under  the  laws  of 


the  Dominion  of  Canada  (hereinafter  called  the  Com¬ 
pany),  for  value  received,  hereby  promises  to  pay  to 
bearer,  or  if  this  debenture  be  registered,  to  the  regis¬ 
tered  holder  hereof,  on  the  first  day  of  April,  1942,  one 
thousand  dollars  (f 1,000)  in  gold  coin  of  the  United 
States  of  America  of  or  equal  to  the  standard  of  weight 
and  fineness  existing  on  April  1,  1922,  at  the  principal 
office  of  Guaranty  Trust  Company  of  New  York  in  the 
Borough  of  Manhattan,  City  of  New  York,  United  States 
of  America,  and  to  pay  interest  thereon  from  April  1, 
1922,  in  like  gold  coin  at  said  office  at  the  rate  of  six 
per  cent  (0%)  per  annum,  semi-annually  on  the  first  day 
of  April  and  the  first  day  of  October  in  each  year,  until 
payment  of  said  principal  sum,  but  only  upon  presenta¬ 
tion  and  surrender  of  the  annexed  coupons  as  they 
severally  mature,  without  deduction  from  principal  or 
interest  of  or  for  any  tax,  assessment  or  governmental 
charge  now  or  hereafter  levied  or  imposed  by  the 
Dominion  of  Canada  or  by  any  province,  county,  munici¬ 
pality  or  any  other  taxing  authority  thereof  or  therein. 

This  debenture  is  one  of  a  duly  authorized  issue  of 
debentures  of  the  Company  known  as  its  Twenty-Year 
Gold  Debentures,  limited  to  the  aggregate  principal 
amount  of  $10,000,000,  all  issued  and  to  be  issued  under 
and  pursuant  to  an  Agreement  dated  April  1,  1922,  duly 
executed  by  the  Company  to  Guaranty  Trust  Company 
of  New  York,  a  corporation  of  the  State  of  New  York,  as 
Trustee,  to  which  Agreement  reference  is  hereby  made 
for  a  description  of  the  terms  and  conditions  on  which 
such  debentures  are  issued  and  of  the  rights  of  the 
Trustee  and  the  holders  of  the  debentures  thereunder. 

At  the  option  of  the  Company  the  debentures  of 
Series  A  may  be  redeemed  on  any  interest  payment  date 
prior  to  maturity,  either  as  a  whole  or  in  amounts  of  not 
less  than  $1,000,000  principal  amount  at  any  one  time,  on 
at  least  sixty  (00)  days  written  notice  by  publication  once 
a  week  for  six  (6)  successive  weeks  in  one  daily  newspaper 
published  in  the  Borough  of  Manhattan,  City  of  New 
York,  and  in  one  daily  newspaper  published  in  the  City  of 
Toronto,  Ontario,  all  as  provided  in  said  Agreement,  at 
the  principal  amount  and  accrued  interest,  together  with 
premiums  as  follows:  a  premium  of  seven  and  one-half 


3 


per  cent  (7*4%)  if  redeemed  on  or  before  April  1,  1932, 
five  per  cent  (5%)  if  redeemed  thereafter  and  on  or 
before  April  1,  1937,  four  per  cent  (4%)  if  redeemed 
thereafter  and  on  or  before  April  1,  1938,  three  per  cent 
(3%)  if  redeemed  thereafter  and  on  or  before  April  1, 
1939,  two  per  cent  (2%)  if  redeemed  thereafter  and  on 
or  before  April  1,  1940,  or  one  per  cent  (1%)  if  redeemed 
thereafter  prior  to  maturity. 

In  case  of  the  happening  of  an  event  of  default  as 
specified  in  said  Agreement,  the  principal  of  this  deben¬ 
ture  and  of  all  other  debentures  of  this  issue  may  be 
declared  and  may  become  due  and  payable  forthwith 
in  the  manner  and  with  the  effect  provided  in  said 
Agreement. 

Unless  registered  as  herein  provided  the  debentures 
shall  pass  by  delivery.  Any  debenture  may  be  regis¬ 
tered  as  to  principal  in  the  name  of  the  holder  at  the 
principal  office  of  the  Trustee  in  the  Borough  of  Man¬ 
hattan,  City  of  New  York,  such  registry  being  noted  on 
the  debenture,  after  which  no  transfer  shall  be  valid 
unless  made  on  such  register  by  the  registered  holder  in 
person  or  by  attorney  duly  authorized  and  similarly  noted 
on  the  debenture;  but  the  same  may  be  discharged  from 
registry  by  a  like  transfer  to  bearer  noted  on  the  deben¬ 
ture,  and  thereupon  transferability  by  delivery  shall  be 
restored.  Such  registration  shall  not  affect  the  negotia¬ 
bility  of  the  coupons,  which  shall  continue  to  be  payable 
to  bearer  and  transferable  by  delivery. 

No  recourse  shall  be  had  for  the  payment  of  the  prin¬ 
cipal  or  interest  of  this  debenture,  or  for  any  claim  based 
thereon  or  under  the  Agreement  under  which  this  deben¬ 
ture  is  issued,  against  any  shareholder,  officer  or  director 
of  the  Company  or  of  any  successor  company,  all  such 
individual  liability  being  by  the  acceptance  hereof  ex¬ 
pressly  waived  and  released. 

This  debenture  shall  not  become  obligatory  for  any 
purpose  until  authenticated  by  the  Trustee  upon  the  cer¬ 
tificate  hereon  provided  for  such  purpose. 

In  witness  whereof,  Canadian  General  Electric 
Company,  Limited,  has  caused  this  debenture  to  be 
signed  in  its  name  and  on  its  behalf  by  its  President  or  a 


4 


Vice-President  and  by  its  Secretary  or  an  Assistant  Sec¬ 
retary,  and  its  corporate  seal  to  be  hereto  affixed,  and 
coupons  for  interest  bearing  the  engraved  facsimile  signa¬ 
ture  of  its  Secretary  to  be  attached  hereto.  Dated  the 
first  day  of  April,  1922. 

Canadian  General  Electric  Company,  Limited 


President. 


Secretary. 

[form  of  interest  coupon  of  series  a  debenture.] 
No .  $30. 

On  the  first  day  of  19  ,  Canadian 

General  Electric  Company,  Limited,  will  pay  to  bearer 
on  surrender  of  this  coupon,  thirty  dollars  ($30)  in 
United  States  gold  coin,  at  the  principal  office  of  Guar¬ 
anty  Trust  Company  of  New  York  in  the  Borough  of 
Manhattan,  City  of  New  York,  being  six  months  interest 
then  due  on  its  Twenty-Year  Gold  Debenture,  6%  Series 

A,  No . ,  unless  such  debenture  shall  have  been 

called  for  previous  redemption. 


Secretary. 

[form  of  trustee’s  certificate  on  all  debentures.] 

This  is  one  of  the  debentures  described  in  the  within 
mentioned  Trust  Agreement. 

Guaranty  Trust  Company  of  New  York, 

Trustee. 


By . 

And  whereas  the  execution  of  this  Agreement  and 
the  issuance  of  five  million  dollars  ($5,000,000)  prin¬ 
cipal  amount  of  said  debentures  to  be  known  as  “6%, 


Series  A”,  and  to  conform  to  the  provisions  hereinafter 
contained,  has  been  duly  authorized  by  the  share¬ 
holders  and  by  the  Board  of  Directors  of  the  Company  at 
meetings  duly  called  and  held,  and  all  things  necessary 
to  make  the  debentures,  when  authenticated  by  the  Trus¬ 
tee,  valid,  legal  and  binding  obligations  of  the  Company, 
and  to  make  this  Agreement  a  valid  and  binding  agree¬ 
ment  for  the  enforcement  of  the  payment  of  the  deben¬ 
tures  and  interest  thereon,  have  been  done  and  performed, 
and  the  issue  of  these  debentures  and  of  this  Agreement 
have  been  in  all  respects  duly  authorized : 

Now,  therefore,  in  consideration  of  the  premises  and 
of  the  sum  of  one  dollar  duly  paid  by  the  Trustee  to  the 
Company,  the  receipt  of  which  is  hereby  acknowledged, 
the  Company  covenants  and  agrees  with  the  Trustee,  for 
the  equal  benefit  of  all  present  and  future  holders  of  said 
debentures  and  coupons,  as  follows: 

ARTICLE  ONE. 

Form,  Execution  and  Issue  of  Debentures. 

Section  1.  The  debentures  shall  be  issued  in  series, 
each  series  to  be  designated  by  such  distinguishing  letter 
as  the  Company  may  determine  and  the  Trustee  may 
approve.  The  debentures,  coupons  and  Trustee’s  certifi¬ 
cate  shall  be  substantially  in  the  form  hereinabove  set 
forth,  with  any  appropriate  and  necessary  changes  in  re¬ 
spect  to  denominations,  interest  rate  and/or  redemption 
provisions  in  the  form  of  debentures  and  coupons  of 
series  other  than  Series  A.  The  debentures  shall  be  known 
as  the  Company’s  Twenty-Year  Gold  Debentures,  shall  be 
dated  April  1,  1922,  and  payable  April  1,  1912,  and  shall 
bear  interest  as  hereinafter  provided,  payable  semi-annu¬ 
ally  on  the  first  day  of  April  and  the  first  day  of  October 
in  each  year,  until  payment  of  the  principal  sum,  both 


6 


principal  and  interest  to  be  payable  in  gold  coin  of  the 
United  States  of  America  of  or  equal  to  the  standard  of 
weight  and  fineness  existing  on  April  1,  1922.  The  deben¬ 
tures  may  contain  such  specifications  as  may  be  required 
to  conform  to  any  rule  of  the  New  York  Stock  Exchange 
or  any  other  stock  exchange  and  any  usage  with  respect 
thereto. 

Five  million  dollars  ($5,000,000)  principal  amount  of 
the  debentures  shall  constitute  Series  A.  Debentures  of 
Series  A  shall  be  issued  in  denominations  of  $1,000,  num¬ 
bered  consecutively  M-l  and  upwards,  and  shall  bear  in¬ 
terest  at  the  rate  of  six  per  cent.  (6%)  per  annum,  and 
shall  be  redeemable  before  maturity  at  the  option  of  the 
Company  as  a  whole  or  in  amounts  of  not  less  than 
$1,000,000  principal  amount  at  any  one  time,  on  any 
interest  payment  date  in  the  manner  hereinafter  pro¬ 
vided  in  Article  Three  hereof,  at  the  principal  amount 
thereof  and  accrued  interest  to  the  date  of  redemption, 
together  with  a  premium  of  seven  and  one-half  per  cent. 
(71/o%)  if  redeemed  on  or  before  April  1,  1932,  or  to¬ 
gether  with  a  premium  of  five  per  cent.  (5%)  if  redeemed 
thereafter  and  on  or  before  April  1,  1937,  or  together  with 
a  premium  of  four  per  cent.  (4%)  if  redeemed  thereafter 
and  on  or  before  April  1, 1938,  or  together  with  a  premium 
of  three  per  cent.  (3%)  if  redeemed  thereafter  and  on  or 
before  April  1,  1939,  or  together  with  a  premium  of  two 
per  cent.  (2%)  if  redeemed  thereafter  and  on  or  before 
April  1,  1940,  or  together  with  a  premium  of  one  per  cent. 
(1%)  if  redeemed  thereafter  prior  to  maturity. 

Debentures  of  series  other  than  Series  A  shall  be  in  all 
respects  like  Series  A  except  that  the  debentures  of  any 
other  series  shall  be  of  such  denominations  and  numbered 
in  such  manner  and  shall  bear  such  rate  of  interest  and  be 
redeemable  at  such  prices  (not  less  than  par)  and  in  such 
minimum  amounts  (if  any)  upon  any  partial  redemption, 


7 


as  may  be  determined  by  the  Board  of  Directors  of  the 
Company  at  the  time  of  the  creation  of  snch  series. 

Section  2.  All  debentures  shall  be  executed  on  be¬ 
half  of  the  Company  by  its'  President  or  a  Vice-Presi¬ 
dent  and  by  its  Secretary  or  an  Assistant  Secretary, 
and  shall  be  delivered  to  the  Trustee  for  authentication  by 
it ;  and  thereupon,  as  provided  in  this  Agreement  and  not 
otherwise,  the  Trustee  shall  authenticate  and  shall  deliver 
the  same.  Only  such  debentures  as  shall  bear  thereon  en¬ 
dorsed  a  certificate  of  authentication  substantially  in  the 
form  hereinabove  recited,  signed  by  the  Trustee,  shall  be 
entitled  to  any  right  or  benefit  under  this  Agreement.  No 
debenture  or  coupon  thereunto  appertaining  shall  be  valid 
or  obligatory  for  any  purpose  until  such  certificate  shall 
have  been  duly  endorsed  upon  such  debenture,  and  such 
authentication  by  the  Trustee  upon  any  debenture 
shall  be  conclusive  evidence  that  the  debenture  so  au¬ 
thenticated  has  been  duly  issued  hereunder,  and  that  the 
holder  is  entitled  to  the  benefit  of  the  trust  hereby  created. 
The  Trustee  shall  not  authenticate  or  deliver  any  deben¬ 
tures  unless  all  coupons  thereon  then  matured  shall 
have  been  detached  and  cancelled. 

In  case  any  of  the  officers  of  the  Company  who  shall 
have  signed  any  of  the  debentures  shall  cease  to  be  such 
officers  of  the  Company  before  the  debentures  so  signed 
shall  have  been  actually  authenticated  and  delivered  by 
the  Trustee,  such  debentures  may  nevertheless  be  adopted 
by  the  Company,  and  be  issued,  authenticated  and  de¬ 
livered  as  though  the  persons  who  signed  such  debentures 
had  not  ceased  to  be  officers  of  the  Company ;  and  also  any 
debenture  may  be  signed  in  behalf  of  the  Company  by  such 
persons  as  at  the  actual  date  of  the  execution  of  the  deben¬ 
ture  shall  be  proper  officers  of  the  Company,  although 
at  the  time  of  the  date  or  at  the  time  of  the  issue  of  the 
debenture  any  such  person  shall  not  have  been  an  officer 


8 


of  the  Company.  The  coupons  to  be  attached  to  the  deben¬ 
tures  shall  be  authenticated  by  the  facsimile  signature 
of  the  present  Secretary  or  any  future  Secretary  of  the 
Company,  and  the  Company  may  adopt  and  use  for  that 
purpose  the  facsimile  signature  of  any  person  who  shall 
have  been  such  Secretary,  notwithstanding  the  fact  that 
he  may  have  ceased  to  be  such  Secretary  at  the  time  when 
such  debentures  shall  be  actually  authenticated  and 
delivered. 

Section  3.  The  aggregate  principal  amount  of  deben¬ 
tures  which  may  be  executed  by  the  Company  and  authen¬ 
ticated  by  the  Trustee  is  limited  to  the  sum  of  ten 
aiillion  dollars  ($10,000,000),  except  as  provided  in 
Section  6  hereof.  Forthwith  upon  the  execution  and 
delivery  of  this  Agreement,  or  from  time  to  time  there¬ 
after,  debentures  in  the  principal  amount  of  ten  million 
dollars  ($10,000,000)  may  be  executed  by  the  Company 
and  delivered  to  the  Trustee  for  authentication  and 
thereupon  shall  be  authenticated  and  delivered  by  the 
Trustee  upon  the  written  order  of  the  Company  signed 
by  its  President  or  any  Vice-President.  In  the  case  of  a 
series  other  than  Series  A  the  Company  shall  deliver  to 
the  Trustee  a  copy  of  a  resolution  certified  by  its  Secre¬ 
tary  or  an  Assistant  Secretary  to  have  been  duly  adopted 
by  the  Board  of  Directors  of  the  Company,  creating  such 
other  series  of  debentures  and  establishing  the  denomina¬ 
tions,  interest  rate  and  redemption  price  or  prices  in 
respect  to  such  series,  and  the  minimum  amount  (if  any) 
redeemable  at  any  one  time,  and  authorizing  the  issue 
thereof. 

Section  4.  The  Company  at  the  principal  office  of  the 
Trustee  in  the  Borough  of  Manhattan,  City  of  New  York, 
will  keep  a  sufficient  register  or  registers  of  debentures, 
and  upon  presentation  for  such  purpose  at  such  office  the 
Company  will  under  such  reasonable  regulations  as  it 
may  prescribe  register  therein  as  to  principal  any  deben¬ 
tures  so  presented  to  it. 


9 


The  holder  of  any  debenture  may  have  the  ownership 
thereof  registered  at  said  office,  such  registry  being  noted 
on  the  debenture,  after  which  no  transfer  shall  be  valid 
unless  made  on  such  register  by  the  registered  holder  in 
person  or  by  attorney  duly  authorized  and  similarly  noted 
on  the  debenture;  but  the  same  may  be  discharged  from 
registry  by  a  like  transfer  to  bearer  noted  on  the  deben¬ 
ture,  and  thereupon  transferability  by  delivery  shall  be  re¬ 
stored;  but  it  may  again,  from  time  to  time,  be  registered 
or  transferred  to  bearer  as  before.  Such  registration  shall 
not  affect  the  negotiability  of  the  coupons,  which  shall 
continue  to  be  payable  to  bearer  and  transferable  by 
delivery. 

Section  5.  As  to  all  debentures  registered  as  to  prin¬ 
cipal,  the  person  in  whose  name  the  same  shall  be  regis¬ 
tered  shall  for  all  purposes  of  this  Agreement  be  deemed 
and  regarded  as  the  absolute  owner  thereof,  and  payment 
of  or  on  account  of  the  principal  of  such  debenture  shall 
be  made  only  to  or  upon  the  order  of  such  registered 
holder  thereof.  All  such  payments  shall  be  valid  and 
effectual  to  satisfy  and  discharge  the  liability  upon  such 
debentures  to  the  extent  of  the  sum  or  sums  so  paid.  The 
Company  and  the  Trustee  may  deem  and  treat  the  bearer 
of  any  debenture  which  shall  not  at  the  time  be  registered 
as  to  principal,  and  the  bearer  of  any  coupon  for  interest 
on  any  debenture,  whether  such  debenture  be  registered 
or  not,  as  the  absolute  owner  of  such  debenture  or  coupon 
for  the  purpose  of  receiving  payment  thereof  and  for  all 
other  purposes  whatsoever,  whether  such  debenture  or 
coupon  be  overdue  or  not,  and  neither  the  Company  nor 
the  Trustee  shall  be  affected  by  any  notice  to  the  contrary. 

Section  6.  In  case  any  debenture  with  the  coupons 
thereto  appertaining  shall  be  mutilated  or  destroyed  or 


10 


lost,  the  Company  in  its  discretion  may  issue,  and  there¬ 
upon  the  Trustee  shall  authenticate  and  deliver,  a  new 
debenture  of  like  tenor,  bearing  the  same  number,  in 
exchange  and  substitution  for,  and  upon  cancellation  of, 
the  mutilated  debenture  and  its  coupons,  or  in  lieu  of 
and  in  substitution  for,  the  debenture  and  its  coupon  so 
destroyed  or  lost.  The  applicant  for  such  substituted 
debenture  shall  furnish  to  the  Company  and  the  Trustee 
satisfactory  evidence  of  the  destruction  or  loss  of  such 
debenture  and  its  coupons  so  destroyed  or  lost,  and  said 
applicant  shall  furnish  indemnity  satisfactory  to  both 
of  them  in  their  discretion. 

Section  7.  Until  permanent  engraved  coupon  deben¬ 
tures,  payable  to  bearer,  are  ready  for  delivery  there  may 
be  issued,  authenticated  and  delivered  in  lieu  thereof,  upon 
the  conditions  hereinabove  stated,  temporary  debentures 
payable  to  bearer,  but  without  coupons,  in  such  denomina¬ 
tions  as  the  Company  shall  determine,  and  otherwise  sub¬ 
stantially  of  the  tenor  of  the  debentures  hereinabove 
described,  and  as  soon  as  such  permanent  coupon  deben¬ 
tures  can  be  prepared  the  Company  will  execute  and  the 
Trustee  will  authenticate  and  deliver  the  same  with  all 
unmatured  coupons  thereto  attached  in  exchange  for  such 
temporary  debentures.  Until  so  exchanged,  such  tem¬ 
porary  debentures  shall  in  all  respects  be  entitled  to  the 
same  benefit  of  this  Agreement  as  permanent  debentures 
issued  and  authenticated  hereunder.  Every  temporary 
debenture  surrendered  in  exchange  for  permanent  deben¬ 
tures  shall  be  destroyed.  Any  interest  on  any  temporary 
debenture  paid  prior  to  any  exchange  of  such  temporary 
debenture  for  a  permanent  debenture  or  debentures,  shall 
be  noted  in  writing  upon  such  temporary  debenture. 


11 


ARTICLE  TWO. 

Particular  Covenants  of  the  Company. 

Section  8.  The  Company  covenants  that  it  will  duly 
and  punctually  pay  the  principal  and  interest  of  all 
debentures  issued  hereunder  at  the  dates  and  place  and 
in  the  manner  mentioned  in  the  said  debentures  or  in 
the  coupons  thereto  belonging,  according  to  the  true 
intent  and  meaning  thereof.  The  Company  will  pay  both 
the  principal  and  interest  of  said  debentures  without  de¬ 
duction  of  or  for  any  tax,  assessment  or  governmental 
charge  now  or  hereafter  levied  or  imposed  by  the  Domin¬ 
ion  of  Canada  or  by  any  province,  county,  municipality 
or  any  other  taxing  authority  thereof  or  therein.  When 
and  as  debentures  and  coupons  are  paid  they  shall  be 
cancelled,  and  no  debentures  shall  be  issued  in  place 
thereof. 

Section  9.  The  Company  covenants  that  it  will  main¬ 
tain  an  office  or  agency  at  the  principal  office  of  Guaranty 
Trust  Company  of  New  York  in  the  Borough  of  Man¬ 
hattan,  Citj'  of  New  York,  while  any  of  said  debentures 
are  outstanding,  where  notices,  presentations  and  de¬ 
mands  to  or  upon  the  Company  in  respect  of  said  deben¬ 
tures  or  their  coupons  may  be  given  or  made.  In  default 
of  any  such  office  or  agency,  presentation  and  demand 
may  be  made  and  notice  served  at  the  office  of  the  Trustee. 

Section  10.  The  term  “subsidiary”  as  used  in  this 
Agreement  shall  mean  (a)  Canadian  Allis-Chalmers, 
Limited  (a  corporation  incorporated  under  the  Laws  of 
the  Dominion  of  Canada),  (b)  certain  other  Canadian 
companies  now  inoperative  and  included  in  the  Com¬ 
pany's  consolidated  balance  sheet  of  December  31,  1921, 
of  which  companies  the  Company  owns  all  the  outstand- 


12 


ing  shares  (except  directors’  qualifying  shares),  and  (c) 
any  company  in  which  the  Company  or  any  subsidiary 
may  in  the  future  either  separately  or  in  the  aggregate 
acquire  more  than  fifty  per  cent.  (50%)  of  the  outstand¬ 
ing  voting  shares,  any  such  last  named  company  to  be 
deemed  a  subsidiary  only  so  long  as  such  ownership  of 
voting  shares  is  retained. 

Section  11.  The  Company  covenants  that  except  as 
hereinafter  expressly  permitted,  it  will  not  directly  or  in¬ 
directly  mortgage,  pledge  or  create  any  charge  upon  any  of 
its  property  or  assets,  unless  the  Company  shall  in  the  in¬ 
strument  creating  such  mortgage,  pledge  or  charge  secure 
the  carrying  out  of  this  Agreement  and  the  payment  of  the 
principal  and  interest  of  all  debentures  issued  and  issu¬ 
able  hereunder  in  priority  to  any  indebtedness  or  obliga¬ 
tions  secured  by  such  mortgage,  pledge  or  charge.  In 
case  of  a  breach  of  this  covenant,  in  addition  to  any  other 
remedy  herein  provided  upon  such  breach,  the  Company 
hereby  creates  a  lien  and  charge  in  favor  of  every  deben¬ 
ture  issued  and  issuable  hereunder  prior  and  superior  to 
the  lien  in  favor  of  any  other  indebtedness  or  obligati  ms 
secured  by  any  mortgage,  pledge  or  charge  not  herein  per¬ 
mitted.  To  make  this  covenant  fully  effectual,  the  Com¬ 
pany  hereby  includes  under  and  secures  by  any  mortgage, 
pledge,  deed  of  trust  or  other  instrument  or  agreement  of 
charge  hereafter  made  or  executed  by  the  Company  or  its 
successor  not  herein  permitted,  any  and  all  debentures 
then  or  at  any  time  thereafter  issued  and  outstanding 
hereunder,  with  the  same  force  and  effect  as  though  each 
and  every  such  debenture  were  specifically  named  and  in¬ 
cluded  in  such  future  mortgage,  pledge,  deed  of  trust  or 
other  instrument  or  agreement  of  charge  as  having  a  lien 
prior  to  any  indebtedness  or  other  obligations  created  or 
issued  thereunder  and  secured  thereby. 


13 


The  Company  further  covenants  that  except  as  herein¬ 
after  expressly  permitted  it  will  not  permit  any  sub¬ 
sidiary  to  mortgage,  pledge  or  create  any  charge  upon 
any  of  its  property  or  assets,  unless  the  Company  shall 
forthwith  acquire  and  hold  free  from  any  lien  or  charge  all 
of  the  indebtedness  and/or  obligations  created  or  issued 
thereunder  and  secured  thereby;  all  such  indebtedness 
and/or  obligations  until  paid  shall  continue  to  be  held 
free  from  lien  or  charge  by  the  Company,  unless  pledged 
or  hypothecated  by  some  instrument  under  which  all  de¬ 
bentures  issued  and  issuable  hereunder  shall  have  a  prior 
lien  as  hereinabove  provided. 

Nothing  in  this  Section  shall  be  construed  to  prevent 
(1)  the  pledge  by  the  Company  or  any  subsidiary  of  per¬ 
sonal  property  (other  than  shares  of  subsidiaries)  in  the 
ordinary  course  of  business  to  secure  obligations  maturing 
not  later  than  eighteen  (18)  months  from  the  date  thereof, 
or  (2)  the  purchase  of  property  by  the  Company  or 
any  subsidiary  subject  to  any  existing  mortgage  or 
lien,  or  (3)  at  the  time  of  the  acquisition  by  the 
Company  or  any  subsidiary  of  any  new  property,  the 
execution  by  the  Company  or  such  subsidiary  of  a  pur¬ 
chase  money  mortgage  or  a  mortgage  in  the  nature  of  a 
purchase  money  mortgage  on  such  property. 

Section  12.  The  Company  covenants  that  it  will  not 
sell,  dispose  of  or  part  with  the  control  of  any  voting 
shares  of  Canadian  Allis-Chalmers,  Limited,  at  any  time 
to  such  extent  as  would  reduce  the  Company’s  ownership 
of  such  voting  shares  to  less  than  a  majority  of  the  total 
voting  shares  thereof,  and  that  it  will  not  permit  Cana¬ 
dian  Allis-Chalmers,  Limited,  to  issue  any  additional  of 
its  voting  shares  unless  the  Company  shall  acquire  suf¬ 
ficient  thereof  to  maintain  ownership  of  at  least  a  major¬ 
ity  of  the  voting  shares  thereof. 


14 


Section  13.  The  Company  covenants  that  if  at  any 
time  it  shall  sell  or  otherwise  dispose  of  any  substantial 
amount  of  real  estate  or  any  substantial  part  of  its  manu¬ 
facturing  plants  or  property,  or  any  substantial  holding 
of  shares  in  any  subsidiary,  or  shall  receive  from  any  sub¬ 
sidiary  a  distribution  of  a  substantial  sum  arising  from 
a  similar  sale  or  other  disposition  by  such  subsidiary,  the 
Company  will  within  six  months  after  any  such  sale  or 
distribution  and  receipt,  either  (a)  apply  the  pro¬ 
ceeds  to  the  acquisition  by  the  Company  of  other  real 
estate,  manufacturing  plants  or  property  or  additions 
thereto,  including  machinery  and  equipment,  or  to  the 
acquisition  of  controlling  interests  in  corporations  by 
purchase  or  completion  of  purchase  of  a  majority  of  the 
voting  shares  thereof,  or  to  the  acquisition  of  additional 
voting  or  other  shares  or  securities  of  or  in  corporations 
of  which  the  Company  shall  own  a  majority  of  the  voting 
shares,  or  to  reimburse  itself  for  expenditures  made  by 
it  for  any  such  acquisition  made  subsequent  to  the  date 
of  this  Agreement  and  not  more  than  eighteen  (18) 
months  prior  to  such  sale  or  distribution  and  receipt, 
or  (b)  pay  such  proceeds  over  to  the  Trustee  to  hold  and 
apply  the  same  as  hereinafter  provided. 

Any  such  sale  of  real  estate  or  of  any  manufacturing 
plant  or  property  or  of  shares,  for  a  price  which  shall 
realize  the  Company  two  hundred  and  fifty  thousand  dol¬ 
lars  ($250,000)  or  more,  shall  be  deemed  to  be  a  sale  of 
a  substantial  amount,  part  or  holding  within  the  meaning 
of  this  Section,  and  any  one  receipt  from  a  subsidiary  of 
one  hundred  and  twenty-five  thousand  dollars  ($125,000) 
or  more  shall  be  deemed  to  be  a  distribution  of  a  substan¬ 
tial  sum  within  the  meaning  of  this  Section. 

Such  proceeds  when  received  by  the  Trustee  shall  be 
applied  by  it  from  time  to  time,  upon  the  written  request 
of  the  Company  signed  by  its  President  or  a  Vice- 


15 


President  and  its  Secretary  or  an  Assistant  Secretary,  in 
an}'  of  the  following  ways: 

(1)  to  the  purchase  of  debentures  issued  and  out¬ 
standing  hereunder  at  not  more  than  the  redemption 
price.  The  accrued  interest  on  all  such  debentures 
so  purchased  shall  be  paid  by  the  Company  out  of 
other  moneys,  the  Company  hereby  agreeing  to  make 
such  payments  to  the  Trustee  as  requested  by  it.  All 
debentures  so  purchased  together  with  the  unma¬ 
tured  coupons  shall  be  cancelled  by  the  Trustee  and 
delivered  to  the  Company  at  its  request,  and  no  de¬ 
bentures  shall  be  issued  in  place  thereof. 

(2)  in  case  any  debentures  shall  be  called  for 
redemption,  then  upon  receipt  of  moneys  which  with 
the  funds  already  held  by  the  Trustee  shall  be  suffi¬ 
cient  to  redeem  all  of  the  debentures  so  called  for 
redemption,  such  proceeds  shall  be  applied  by  the 
Trustee  to  the  payment  of  such  debentures  at  the 
redemption  date.  The  accrued  interest  on  all  such 
debentures  shall  be  paid  by  the  Company  out  of 
other  moneys. 

(3)  to  reimburse  the  Company  for  expenditures 
by  the  Company  for  the  acquisition  of  real  estate 
or  manufacturing  plants  or  property  or  for  additions 
thereto,  including  machinery  and  equipment,  or  the 
acquisition  of  controlling  interest  in  corporations  by 
purchase  or  completion  of  purchase  of  a  majority  of 
the  voting  shares  thereof,  or  for  the  acquisition  of 
additional  voting  or  other  shares  or  securities  of  or 
in  corporations  of  which  the  Company  shall  own  a 
majority  of  the  voting  shares,  made  by  the  Company 
since  the  date  of  this  Agreement  and  not  more  than 
eighteen  (18)  months  prior  to  any  application  for 
such  withdrawal.  Whenever  from  time  to  time  the 


16 


.Company  shall  file  with  the  Trustee  its  written  re¬ 
quest  for  the  withdrawal  of  any  such  moneys,  to¬ 
gether  with  a  certificate  signed  by  its  Treasurer 
or  an  Assistant  Treasurer,  setting  forth  in  rea¬ 
sonable  detail  the  expenditures  so  made  and  the 
respective  dates  of  such  acquisitions,  and  stating 
that  such  expenditures  have  not  been  included  in  any 
certificate  previously  furnished  to  the  Trustee  here¬ 
under,  or  reimbursed  out  of  any  application  of 
proceeds  as  hereinabove  under  clause  (a)  of  this  sec¬ 
tion  provided,  the  Trustee  shall  pay  over  to  the 
Company  from  the  sums  then  held  by  it  an  amount 
equal  to  the  amount  of  the  expenditures  so  certified. 

Pending  the  application  by  the  Trustee  of  such 
moneys,  as  hereinabove  set  forth,  the  Trustee,  if  so  re¬ 
quested  by  the  Company,  shall  invest  the  same  in  such 
bonds  or  other  obligations  listed  upon  the  New  York, 
Montreal  or  Toronto  Stock  Exchanges  as  the  Company 
may  request  and  the  Trustee  shall  approve.  So  long  as 
the  Company  shall  not  be  in  default  hereunder  it  shall 
be  entitled  to  payment  of  the  interest  on  such  bonds  or 
other  obligations  received  by  the  Trustee. 


Section  14.  The  Company  covenants  that  so  long  as 
any  of  the  debentures  are  outstanding, 

(a)  the  Company  will  not  declare  or  pay  any 
dividends  upon  its  common  shares  (other  than  divi¬ 
dends  payable  in  its  common  shares)  if  such  declara¬ 
tion  or  payment  would  reduce  the  amount  of  cur¬ 
rent  assets  as  hereinafter  defined,  to  an  amount  less 
than  one  hundred  and  fifty  per  cent.  (150%)  of  the 
indebtedness  of  the  Company,  as  hereinafter  defined, 
except  debentures  issued  hereunder  and  outstanding; 


17 


(&)  neither-  the  Company  nor  any  subsidiary  will 
give  or  create  any  priority  or  charge  upon  any  of  its 
assets  under  Section  88  of  the  Bank  Act  of  the 
Dominion  of  Canada  or  under  any  other  authority 
to  cover  banking  advances,  if  thereby  the  amount  of 
current  assets,  after  deducting  the  amount  of  the 
indebtedness  as  to  which  such  priority  is  given, 
would  be  reduced  to  less  than  one  hundred  and 
twenty-five  per  cent.  (125%)  of  the  indebtedness  of 
the  Company,  as  hereinafter  defined,  except  deben¬ 
tures  issued  hereunder  and  outstanding  and  except 
the  indebtedness  as  to  which  such  priority  is  given; 

(c)  the  Company  will  at  all  times  maintain  cur¬ 
rent  assets  in  an  amount  at  least  equal  to  one  hun¬ 
dred  per  cent.  (100%)  of  the  indebtedness  of  the 
Company,  as  hereinafter  defined,  except  debentures 
issued  hereunder  and  outstanding. 

As  used  in  this  Agreement  the  term  “current  assets” 
shall  mean  the  following  assets  of  the  Company  and  its 
subsidiaries,  as  shown  by  a  consolidated  balance  sheet: 

( 1 )  Cash  on  hand  or  in  bank ; 

(2)  manufactured  stock,  stock  in  process,  ma¬ 
terials,  operating  and  other  supplies,  all  to  be  valued 
at  actual  cost  or  market  value,  whichever  be  lower; 

(3)  good  notes  and  accounts  and  bills  receivable 
contracted  in  the  ordinary  course  of  business,  if  such 
notes,  accounts  and  bills  receivable  are  due  within 
two  years; 

(4)  Canadian  or  United  States  Government 
bonds,  and  other  marketable  securities,  at  the  fair 
realizable  value  thereof. 


As  used  in  this  Agreement,  the  term  “indebtedness 
of  the  Company’’  shall  mean  the  entire  indebtedness, 
direct  and  contingent,  of  the  Company  and  its  subsidi¬ 
aries  as  shown  by  a  consolidated  balance  sheet  of  the 
Company  and  its  subsidiaries,  except  that  to  the  extent  of 
$500,000  but  no  more,  contingent  liabilities  of  the  Com¬ 
pany  and  its  subsidiaries  (including  liability  as  indorser 
or  guarantor)  may  be  excluded  from  such  computation. 

Section  15.  The  Company  covenants  that  it  will  de¬ 
liver  to  the  Trustee  within  four  months  after  the  close 
of  each  fiscal  year  beginning  with  the  fiscal  year  ending 
in  1022,  and  within  two  months  after  the  close  of  each 
six  months  period  after  the  close  of  every  fiscal  year,  a 
consolidated  balance  sheet  and  a  statement  of  the  income 
and  profit  and  loss  accounts,  of  the  Company  and  its 
subsidiaries,  setting  forth  in  reasonable  detail  the  result 
of  operations  and  the  financial  condition  of  the  Company 
and  its  subsidiaries  and  showing  current  assets  and 
indebtedness  and  the  component  parts  thereof  as  herein¬ 
above  defined.  One  of  such  balance  sheets  and  state¬ 
ments  shall  be  for  the  period  covered  by  the  annual 
statement  of  the  Company  to  its  shareholders  and  shall 
be  audited  by  a  firm  of  public  accountants;  the  other  of 
such  balance  sheets  and  statements  shall  be  as  of  the 
end  of  the  six  months  succeeding  the  period  covered  by 
the  annual  statement  and  shall  be  certified  to  by  the 
Treasurer  of  the  Company. 

The  Company,  at  the  time  of  the  delivery  to  the 
Trustee  of  such  statement  and  balance  sheet,  will  also 
deliver  to  the  Trustee  a  statement  signed  by  its  Treas¬ 
urer  or  an  Assistant  Treasurer  showing  (a)  the  names 
of  the  subsidiaries  of  the  Company,  (b)  the  amount  of 
outstanding  voting  shares  of  each  subsidiary,  and  (c) 
the  number  of  such  shares  of  each  subsidiary  owned  by 
the  Company. 


19 


Section  16.  The  Company  covenants  that  it  will  at 
all  times  keep  proper  books  of  record  and  account,  in 
which  full,  true  and  correct  entries  will  be  made  of  all 
its  dealings  and  transactions,  and  will  cause  similar 
books  of  record  and  account  to  be  kept  by  its  sub¬ 
sidiaries.  The  Trustee  may,  but  shall  not  be  under  any 
obligation  so  to  do  unless  requested  in  writing  by  the 
holders  of  at  least  twenty-five  per  cent,  in  principal 
amount  of  the  debentures  then  outstanding,  at  any  time 
require  an  audit  and  examination  of  the  books  and  ac¬ 
counts  of  the  Company  and  of  its  subsidiaries  to  be  made 
by  public  accountants  selected  by  the  Trustee,  which 
examination  shall  be  at  the  expense  of  the  Company. 

Section  17.  The  Company  covenants  that  it  will  dili¬ 
gently  preserve  all  franchises  to  it  granted  and  upon  it 
conferred,  in  so  far  as  they  shall  continue  to  be  advan¬ 
tageous  to  the  Company,  and  will  at  all  times  maintain, 
preserve  and  keep  its  plants,  including  fixtures,  equip¬ 
ment  and  appurtenances,  and  every  part  thereof,  in  good 
repair,  working  order  and  condition,  and  will  from  time 
to  time  make  all  needful  and  proper  repairs. 

Section  18.  The  Company  covenants  that  it  will 
promptly  pay  and  discharge  all  lawful  taxes,  assessments 
and  governmental  charges  or  levies  imposed  upon  the 
income  and  profits  of  the  Company,  or  upon  any  prop¬ 
erty  belonging  to  the  Company  or  upon  any  part  thereof, 
as  and  when  the  same  shall  become  due  and  payable, 
as  well  as  all  lawful  claims  for  labor,  materials  and 
supplies  which  if  unpaid  might  by  law  become  a  lien 
or  charge  upon  its  property,  provided,  however,  that  the 
Company  shall  not  be  required  to  pay  any  such  tax, 
assessment,  charge,  levy  or  claim  so  long  as  the  validity 
thereof  shall  be  contested  in  good  faith  by  appropriate 
legal  proceedings. 


20 


Section  19.  The  Company  covenants  that  it  will  exer¬ 
cise  all  lawful  powers  which  as  shareholder  or  otherwise 
it  may  possess,  to  the  end  that  each  of  its  subsidiaries 
shall  observe  and  perform  on  its  own  part  in  respect  to 
its  own  property,  business  and  operation  the  same  cove¬ 
nants  and  agreements  as  are  hereinabove  provided  to  be 
kept  by  the  Company  in  Sections  16,  17  and  18  of  this 
Agreement. 


ARTICLE  THREE. 

Redemption  of  Debentures. 

Section  20.  The  Company  at  its  option  may  redeem 
(a)  all  of  the  debentures  issued  hereunder  and  then  out¬ 
standing,  or  ( b )  all  of  the  outstanding  debentures  of  any 
one  series,  or  (c)  such  part  of  the  debentures  of  any  one 
series  as  may  be  determined  by  the  Company  at  the  time 
of  creating  the  series,  in  any  case  on  any  interest  date 
prior  to  maturity,  at  the  principal  amount  thereof  and 
accrued  interest  together  with  the  premiums,  if  any, 
provided  for  by  the  Company  at  the  time  of  creating 
such  series.  Notice  of  intention  to  redeem  shall  be  given 
by  the  Company  by  publication  in  one  daily  newspaper 
of  general  circulation  published  in  the  Borough  of  Man¬ 
hattan,  City  of  New  York,  and  in  one  such  daily  news¬ 
paper  published  in  the  City  of  Toronto,  Ontario,  once  a 
week  for  six  successive  weeks,  the  first  publication  to  be 
not  less  than  sixty  (60)  nor  more  than  eighty  (80)  days 
before  such  redemption  date.  A  copy  of  such  notice 
shall  also  be  mailed  by  the  Company  at  least  sixty  (60) 
and  not  more  than  eighty  (80)  days  before  such  redemp¬ 
tion  date  to  the  holders  of  registered  debentures  which 
are  to  be  redeemed,  at  their  last  addresses  appearing 
upon  the  registry  books.  Before  the  redemption  date 
specified  in  such  notice,  the  Company  will  deposit  with 
the  Trustee  an  amount  sufficient  to  redeem  all  of  the 


21 


outstanding  debentures  which  are  to  be  redeemed,  to  be 
held  for  the  account  of  the  holders  thereof  and  to  be 
paid  to  them  respectively  upon  presentation  and  sur¬ 
render  of  said  debentures  with  all  unmatured  coupons 
thereto  attached.  The  sworn  certificate  of  any  officer 
of  the  Company  as  to  the  giving  of  proper  notice  of 
redemption  shall  be  full  and  complete  authority  to  the 
Trustee  for  any  action  to  be  taken  by  it  in  reliance 
thereon.  In  case  the  Company  shall  elect  to  redeem 
less  than  all  of  the  debentures  then  outstanding,  the 
numbers  of  the  debentures  to  be  redeemed  shall  be  deter¬ 
mined  by  the  Trustee  by  lot  in  such  manner  as  the 
Trustee  may  elect,  and  the  notice  of  intention  to  redeem 
shall  state  the  numbers  of  the  debentures  to  be  redeemed. 

Section  21.  After  the  date  set  for  redemption,  the 
notice  of  intention  to  redeem  having  been  given  as  above 
provided,  said  debentures  so  called  shall  become  due  and 
payable  at  the  principal  office  of  the  Trustee  in  the 
Borough  of  Manhattan,  City  of  New  York,  and  the  neces¬ 
sary  funds  for  redemption  having  been  deposited  with 
the  Trustee,  said  debentures  so  called  shall  cease  to  draw 
interest  and  the  coupons  for  interest  subsequent  to  that 
date  shall  be  void,  and  such  debentures  shall  no  longer 
be  deemed  to  be  outstanding  hereunder  and  shall  cease  to 
be  entitled  to  the  benefit  of  this  Agreement  except  to 
receive  payment  from  the  moneys  reserved  therefor  in 
the  hands  of  the  Trustee. 

Debentures  redeemed  shall  be  cancelled  and  no  deben¬ 
tures  shall  be  issued  in  place  thereof. 

ARTICLE  FOUR. 

Remedies  on  Default. 

Section  22.  In  order  to  prevent  any  accumulation  of 
coupons  after  maturity,  the  Company  covenants  and 


22 


agrees  that,  it  will  not,  directly  or  indirectly,  extend  or 
assent  to  the  extension  of  the  time  for  the  payment  of 
any  coupon  upon  any  of  the  debentures,  and  that  it  will 
not,  directly  or  indirectly,  he  a  party  to  or  approve  of 
any  such  arrangement  by  purchasing  or  funding  such 
coupons  or  in  any  other  manner.  No  such  coupon,  the 
time  of  payment  of  which  shall  have  been  extended  with 
or  without  the  consent  of  the  Company,  and  no  such 
coupon  which  in  any  way  before,  at  or  after  maturity, 
shall  have  been  transferred  or  pledged  separate  or  apart 
from  the  debenture  to  which  it  relates,  unless  accom¬ 
panied  by  such  debenture,  shall  be  entitled  in  case  of  a 
default  hereunder  to  any  benefit  of  or  from  this  Agree¬ 
ment,  except  after  the  prior  payment  in  full  of  the  prin¬ 
cipal  of  all  of  the  debentures  and  of  all  coupons  not  so 
extended,  transferred  or  pledged. 

Section  23.  If  one  or  more  of  the  following  events, 
herein  called  “events  of  default”,  shall  happen,  that  is  to 
say:  (1)  if  default  be  made  in  the  punctual  payment  of 
the  principal  of  any  of  the  said  debentures,  or  (2)  if 
default  be  made  in  the  punctual  payment  of  any  install¬ 
ment  of  interest  and  such  default  shall  continue  for 
thirty  days,  or  (3)  if  default  be  made  in  the  due  observ¬ 
ance  and  performance  of  any  of  the  covenants  or  agree¬ 
ments  on  the  part  of  the  Company  contained  in  Sections 
11,  12,  13  or  14(a)  of  this  Agreement,  or  (4)  if  default  be 
made  in  the  due  observance  and  performance  of  any  other 
covenant,  condition  or  agreement  on  the  part  of  the 
Company,  its  successors  or  assigns  in  the  said  debentures 
or  in  this  Agreement  contained,  and  any  such  last  named 
default  shall  continue  for  a  period  of  thirty  days  after 
written  notice  thereof  shall  have  been  given  to  the  Com¬ 
pany  by  the  Trustee  (whose  duty  it  shall  be  to  give  such 
notice  at  the  request  in  writing  of  the  holders  of  at  least 
twenty-five  per  cent,  in  principal  amount  of  the  deben- 


23 


tures  at  the  time  outstanding  hereunder),  or  in  case  (5) 
an  order  shall  have  been  made  for  the  appointment  of  a 
receiver  of  the  Company  or  of  its  property  and  remain 
in  force  for  thirty  days,  or  the  Company  shall  be  judi¬ 
cially  declared  to  be  bankrupt  or  insolvent,  or  an  order 
be  made  or  a  resolution  adopted  by  the  Board  of  Directors 
of  the  Company  for  the  winding  up  or  dissolution  of  the 
Company,  or  (6)  in  case  the  Company  shall  institute 
proceedings  for  voluntary  bankruptcy,  or  shall  make  an 
assignment  for  the  benefit  of  its  creditors,  or  shall  admit 
in  writing  its  inability  to  pay  its  debts  generally  as  they 
become  due, — then  in  each  and  every  such  case  (unless  the 
principal  of  all  the  debentures  shall  already  have  become 
due  and  payable),  the  Trustee  may,  and  upon  the  written 
request  of  the  holders  of  twenty-five  per  cent.  (25%)  in 
principal  amount  of  the  debentures  at  such  time  outstand¬ 
ing,  shall,  by  written  notice  to  the  Company,  declare  the 
principal  of  all  debentures  then  outstanding  hereunder 
to  be  immediately  due  and  payable,  and  upon  any  such 
declaration  the  same  shall  become  and  be  immediately 
due  and  payable,  anything  in  this  Agreement  or  in  the 
debentures  contained  to  the  contrary  notwithstanding. 

This  provision,  however,  is  subject  to  the  condition 
that  if  at  any  time  after  the  principal  of  the  debentures 
shall  have  been  so  declared  and  become  due  and  payable, 
and  before  any  judgment  or  decree  for  the  payment  of 
moneys  so  due  shall  be  entered,  all  arrears  of  interest  upon 
all  the  debentures  (with  interest  upon  any  overdue 
installments  of  interest  at  the  rate  or  rates  expressed  in 
the  debentures)  and  all  other  sums  payable  under  this 
Agreement,  including  the  expenses  of  the  Trustee,  shall 
have  been  duly  paid,  and  every  other  default  in  the  per¬ 
formance  of  any  covenant  or  provision  of  the  debentures 
or  of  this  Agreement  shall  be  made  good  or  shall  be 
secured  to  the  satisfaction  of  the  Trustee  or  arrangements 
deemed  by  the  Trustee  to  be  adequate  shall  be  made 


24 


therefor, — then  and  in  every  such  case  the  Trustee  may, 
and  upon  the  written  request  of  the  holders  of  a  majority 
in  principal  amount  of  the  debentures  then  outstanding, 
shall,  waive  the  default  by  reason  of  which  the  principal 
of  the  debentures  shall  have  so  become  due,  and  rescind 
and  annul  such  declaration  and  its  consequences;  but 
no  such  waiver,  rescission  or  annulment  shall  extend  to 
or  affect  any  subsequent  default  or  shall  impair  any  right 
consequent  thereon. 

Section  24.  The  Company  covenants  and  agrees  that 
(1)  in  case  default  shall  be  made  in  the  payment  of  any 
installment  of  interest  on  any  debenture  or  debentures 
at  any  time  outstanding  under  this  Agreement  and  such 
default  shall  have  continued  for  the  period  of  thirty  days, 
or  (2)  in  case  default  shall  be  made  in  the  payment  of 
the  principal  of  any  debenture  or  debentures  when  the 
same  shall  become  payable,  whether  upon  maturity  of 
any  of  said  debentures  or  upon  declaration  as  provided 
in  this  Agreement,  then  upon  demand  of  the  Trustee  the 
Company  will  pay  to  the  Trustee,  for  the  benefit  of  the 
holders  of  the  debentures  and  coupons  issued  hereunder 
and  then  outstanding,  the  whole  amount  that  then  shall 
have  become  due  and  payable  on  all  such  debentures  and 
coupons  then  outstanding  for  interest  or  principal  or 
both  as  the  case  may  be,  with  interest  at  the  rate  or  rates 
expressed  in  the  debentures  upon  the  overdue  principal 
and  installments  of  interest;  and  in  addition  thereto  such 
further  amount  as  shall  be  sufficient  to  cover  the  cost  and 
expenses  of  collection,  including  a  reasonable  compensa¬ 
tion  to  the  Trustee,  its  agents,  attorneys  and  counsel  and 
any  expenses  or  liabilities  incurred  by  the  Trustee  here¬ 
under. 

Until  such  demand  is  made  by  the  Trustee,  the  Com¬ 
pany  may  pay  the  principal  and  interest  of  the  deben¬ 
tures  to  the  holders  thereof,  and  shall  not  be  affected  by 


25 


any  notice  to  the  contrary,  whether  the  debentures  are 
overdue  or  not.  If,  however,  demand  shall  be  so  made, 
payment  of  the  debentures  or  of  the  coupons  shall  be 
made  thereafter  only  to  the  Trustee. 

In  case  the  Company  shall  fail  forthwith  to  pay  such 
amounts  upon  such  demand,  the  Trustee  in  its  own  name 
and  as  Trustee  of  an  express  trust  shall  be  entitled  and 
empowered  to  institute  such  action  or  proceedings  at  law 
or  in  equity  as  may  be  advised  by  counsel  for  the  col¬ 
lection  of  the  sums  so  due  and  unpaid,  and  may  prose¬ 
cute  any  such  action  or  proceedings  to  judgment  or  final 
decree,  and  may  enforce  any  such  judgment  or  final 
decree  against  the  Company,  and  collect  the  moneys 
adjudged  or  decreed  to  be  payable  out  of  the  property 
of  the  Company  wherever  situated,  in  the  manner  pro¬ 
vided  by  law. 

Section  25.  The  Trustee  shall,  upon  the  written 
request  of  the  holders  of  seventy-five  per  cent,  in  prin¬ 
cipal  amount  of  the  debentures  at  any  time  outstanding 
hereunder,  waive  any  default  hereunder  and  its  conse¬ 
quences,  except  (1)  a  default  in  the  payment  of  the 
principal  of  the  debentures  at  the  date  of  maturity 
specified  therein,  and  except  (2)  a  default  in  the  payment 
of  interest  on  the  debentures,  unless,  in  the  latter  case, 
prior  to  such  waiver,  all  arrears  of  interest  with  interest 
at  the  rate  or  rates  expressed  in  the  debentures  on  over¬ 
due  installments  of  interest,  and  all  expenses  of  the 
Trustee,  shall  have  been  paid  by  the  Company  or  shall 
have  been  provided  for  by  a  deposit  with  the  Trustee  of 
a  sum  sufficient  to  pay  the  same.  In  case  of  any  such 
waiver,  or  in  case  any  proceedings  taken  on  account  of 
any  such  default  shall  have  been  discontinued  or  aban¬ 
doned  or  determined  adversely  to  the  Trustee  or  the  de¬ 
benture  holders,  then  and  in  every  such  case,  the  Com¬ 
pany,  the  Trustee  and  the  debenture  holders  shall  be 


26 


restored  to  their  former  positions  and  rights  hereunder 
respectively,  but  no  such  waiver  shall  extend  to  any  subse¬ 
quent  or  other  default  or  impair  any  right  consequent 
thereon. 

Section  26.  All  rights  of  action  under  this  Agree¬ 
ment  or  under  any  of  the  debentures  or  coupons  may 
be  enforced  by  the  Trustee  without  the  possession  of  any 
of  the  debentures  or  coupons  or  the  production  thereof 
on  any  trial  or  other  proceedings  relative  thereto,  and 
any  such  suit  or  proceedings  instituted  by  the  Trustee 
shall  be  brought  in  its  name  as  Trustee  and  any  recov¬ 
ery  of  judgment  shall  be  for  the  ratable  benefit  of  the 
holders  of  the  debentures  and  coupons. 

Section  27.  Any  moneys  collected  by  the  Trustee 
shall  be  applied  as  follows  at  the  date  fixed  by  the  Trustee 
for  the  distribution  of  such  moneys,  upon  presentation  of 
the  several  debentures  and  coupons,  and  stamping  thereon 
the  payment,  if  only  partially  paid,  and  upon  the  sur¬ 
render  thereof,  if  fully  paid : 

First.  To  the  payment  of  costs  and  expenses,  including 
a  reasonable  compensation  to  the  Trustee,  its  agents, 
attorneys  and  counsel,  and  of  all  expenses,  liabilities  and 
advances  made  or  incurred  by  the  Trustee. 

Second.  In  case  the  principal  of  the  debentures  shall 
not  have  become  due,  to  the  payment  of  the  interest  in 
default  in  the  order  of  the  maturity  of  the  instalments 
of  such  interest,  with  interest  on  the  overdue  instalments 
at  the  rate  or  rates  expressed  in  the  debentures;  such 
payments  to  be  made  ratably  to  the  persons  entitled 
thereto  without  discrimination  or  preference. 

Third.  In  case  the  principal  of  the  debentures  shall 
have  become  due  by  declaration  or  otherwise,  to  the 


27 


payment  of  the  whole  amount  then  oAving  or  unpaid  upon 
the  debentures  then  outstanding  for  principal  and  inter¬ 
est,  Avith  interest  at  the  rate  or  rates  expressed  in  the 
debentures  on  the  overdue  principal  and  instalments  of 
interest;  in  case  such  moneys  shall  be  insufficient  to  pay 
in  full  the  Avhole  amount  so  due  and  unpaid  upon  the 
debentures,  then  to  the  payment  of  such  principal  and 
interest  without  preference  or  priority  of  principal  over 
interest,  or  of  interest  over  principal,  or  of  any  instal¬ 
ment  of  interest  over  any  other  instalment  of  interest, 
ratably  to  the  aggregate  of  such  principal  and  accrued 
and  unpaid  interest. 

Section  28.  No  holder  of  any  debenture  issued  here¬ 
under  shall  have  any  right  to  institute' any  suit,  action 
or  proceeding  at  law  or  in  equity,  for  the  collection  of 
any  sum  due  from  the  Company  on  such  debenture  on 
account  of  principal  or  interest,  or  for  the  appointment 
of  a  receiver,  or  for  any  other  remedy  hereunder,  unless 
and  until  such  holder  shall  previously  have  given  to  the 
Trustee  written  notice  of  such  default  and  of  the  con¬ 
tinuance  thereof,  as  hereinabove  provided,  and  also  unless 
or  until  the  holders  of  twenty-five  per  cent,  in  principal 
amount  of  the  debentures  then  outstanding  shall  have 
made  written  request  upon  the  Trustee,  and  shall  have 
afforded  to  it  a  reasonable  opportunity  to  institute  such 
action,  suit  or  proceeding  in  its  oavii  name,  and  unless 
also  they  shall  have  offered  to  the  Trustee  security  and 
indemnity  satisfactory  to  it  against  the  costs,  expenses 
and  liabilities  to  be  incurred  therein  or  thereby,  and  the 
Trustee  for  thirty  days  after  receipt  of  such  notification, 
request  and  offer  of  indemnity,  shall  have  neglected  or 
refused  to  institute  any  such  action,  suit  or  proceeding; 
and  such  notification,  request  and  offer  of  indemnity  are 
hereby  declared  in  every  such  case  at  the  option  of  the 
Trustee  to  be  conditions  precedent  to  the  execution  of  the 


28 


powers  and  trusts  of  this  Agreement,  and  to  any  action  or 
cause  of  action  or  for  any  remedy  hereunder;  it  being 
understood  and  intended  and  being  expressly  covenanted 
by  the  taker  and  holder  of  every  debenture  issued  here¬ 
under,  and  every  other  taker  and  holder  and  the  Trustee 
that  no  one  or  more  holders  of  debentures  and  coupons 
shall  have  any  right  in  any  manner  whatever  to  affect,  dis¬ 
turb  or  prejudice  the  rights  of  the  holders  of  any  other 
of  the  debentures  and  coupons,  or  in  any  manner  or  way 
shall  obtain  or  seek  to  obtain  priority  over  or  preference 
to  any  other  such  holders,  or  to  enforce  any  right  here¬ 
under,  except  in  the  manner  herein  provided,  and  for  the 
equal,  ratable  and  common  benefit  of  all  holders  of  the 
outstanding  debentures  and  coupons. 

Section  29.  The  Company  for  itself,  its  successors  and 
assigns,  hereby  agrees  to  waive,  and  does  hereby  abso¬ 
lutely  and  irrevocably  waive  and  relinquish  the  benefit 
and  advantage  of  any  and  all  valuation,  stay,  appraise¬ 
ment,  extension  or  redemption  law  or  laws  now  existing 
or  which  may  hereafter  be  passed,  which,  but  for  this 
provision,  agreement  and  waiver,  might  be  applicable  to 
any  sale  made  under  the  judgment,  order  or  decree  of 
any  court  or  courts  based  on  any  of  the  debentures  or  in¬ 
terest  coupons  or  this  Agreement. 

Section  30.  All  remedies  specifically  conferred  on  the 
Trustee  under  this  Agreement  shall  be  deemed  cumulative 
and  not  exclusive,  and  in  addition  to  every  other  remedy 
existing  at  law  or  in  equity,  and  no  delay  or  omission  of 
the  Trustee  or  of  any  holder  of  any  of  the  debentures  to 
exercise  any  right  or  power  accruing  upon  any  event  of 
default,  shall  impair  any  such  right  or  power  or  shall  be 
construed  to  be  a  waiver  of  any  such  default  or  an 
acquiescence  therein ;  and  every  power  and  remedy  given 
by  this  Article  to  the  Trustee  or  to  the  debenture  holders 


29 


may  be  exercised  from  time  to  time  as  often  as  shall  be 
deemed  expedient  by  the  Trustee  or  by  the  debenture 
holders. 


ARTICLE  FIVE. 

Waiver  of  Individual  Liability. 

Section  31.  Each  of  the  debentures  secured  hereby  is 
issued  upon  the  express  condition  to  which  each  successive 
holder  thereof  expressly  assents  and  by  receiving  the  same 
agrees,  that  no  recourse  under  or  upon  any  obligation, 
covenant  or  agreement  of  this  Agreement,  or  for  the  pay¬ 
ment  of  any  debenture  or  coupon  hereby  secured,  shall  be 
had  to  any  individual  liability  of  any  past,  present  or 
future  shareholder,  officer  or  director  of  the  Company  or 
of  any  successor  company,  all  such  individual  liability 
being  expressly  waived  and  released. 

ARTICLE  SIX. 

Evidence  of  Rights  of  Debenture  Holders. 

Section  32.  Any  demand,  or  request  or  other  instru¬ 
ment  required  by  this  Agreement  to  be  signed  and  exe¬ 
cuted  by  debenture  holders  may  be  in  any  number  of  con¬ 
current  writings  of  similar  tenor  and  may  be  signed  or 
executed  by  such  debenture  holders  in  person  or  by  agent 
appointed  in  writing.  Proof  of  the  execution  of  any  such 
demand,  request  or  other  instrument,  or  of  the  writing 
appointing  any  such  agent,  and  of  the  ownership  by  any 
person  of  any  unregistered  debenture,  shall  be  sufficient 
for  any  purpose  of  this  Agreement,  if  such  proof  be  made 
in  the  following  manner: 

The  fact  and  date  of  the  execution  by  any  person  of 
any  such  demand,  request  or  other  instrument  in  writing 
may  be  proved  by  the  certificate  of  any  notary  public 


30 


or  other  officer  authorized  to  take  acknowledgments  of 
deeds  to  be  recorded,  to  the  effect  that  the  person  signing 
such  request  or  other  instrument  acknowledged  to  him 
the  execution  thereof,  or  by  the  affidavit  of  a  witness  to 
such  execution. 

The  fact  of  the  holding  by  any  debenture  holder  of  any 
unregistered  debentures  and  the  amounts  and  numbers 
of  such  debentures,  and  the  date  of  his  holding  the  same, 
may  be  proved  by  either  producing  and  exhibiting  to  the 
Trustee  the  actual  debentures  themselves,  or  by  a  certifi¬ 
cate  executed  by  any  trust  company,  bank,  banker  or 
other  depositary,  wherever  situated,  if  such  certificate 
shall  be  deemed  by  the  Trustee  to  be  satisfactory,  showing 
that  at  the  date  therein  mentioned  such  person  had  on 
deposit  with  such  depositary  the  debentures  described 
in  such  certificate.  The  Trustee  may  consider  such  owner¬ 
ship  as  continuing  until  written  notice  to  the  contrary 
is  served  upon  the  Trustee. 

The  ownership  of  debentures  registered  as  to  principal 
shall  be  proved  by  the  registers  of  such  debentures  or  by 
a  certificate  of  the  registrar  thereof. 

ARTICLE  SEVEN. 

Concerning  the  Trustee. 

Section  33.  The  Trustee  shall  not  be  answerable  for 
the  default  or  the  misconduct  of  any  agent  or  attorney 
appointed  in  pursuance  hereof,  if  such  agent  or  attorney 
shall  have  been  selected  with  reasonable  care,  nor  respon¬ 
sible  for  anything  whatever  in  connection  with  this  trust 
except  for  its  wilful  misconduct  or  gross  negligence.  The 
Trustee  shall  be  under  no  obligation  to  take  any  action 
toward  the  execution  or  enforcement  of  the  trusts  hereby 
created  which,  in  its  opinion,  shall  be  likely  to  involve  it 
in  expense  or  liability,  unless  one  or  more  of  the  holders 
of  debentures  issued  hereunder  shall,  as  often  as  required 


31 


by  the  Trustee,  furnish  indemnity  satisfactory  to  the 
Trustee  against  such  expense  or  liability;  nor  shall  the 
Trustee  he  required  to  take  notice  of  any  default  or  event 
of  default  hereunder,  and  it  may,  for  all  purposes,  conclu¬ 
sively  assume  that  there  has  been  no  default  or  event  of 
default  hereunder,  unless  and  until  notified  in  writing 
thereof  by  one  or  more  holders  of  debentures  issued  here¬ 
under  and  then  outstanding,  or  to  take  any  action  in 
respect  to  any  default  or  event  of  default  unless  requested 
to  take  action  in  respect  thereof  by  a  writing  signed  by 
the  holders  of  not  less  than  twenty-five  per  cent,  in  prin¬ 
cipal  amount  of  the  debentures  issued  hereunder  and  then 
outstanding,  and  upon  being  tendered  indemnity  as 
hereinabove  provided.  The  foregoing  provisions  of  this 
Section  are  intended  only  for  the  protection  of  the  Trustee 
and  shall  not  be  construed  to  affect  any  discretion  or 
power  by  any  provision  of  this  Agreement  given  to  the 
Trustee  to  determine  whether  or  not  it  shall  take  action 
in  respect  of  any  default  or  event  of  default  without  such 
notice  or  request  from  debenture  holders,  or  to  affect 
any  other  discretion  or  power  given  to  the  Trustee. 

Any  action  by  the  Trustee  upon  the  request  of  any 
person  who  at  the  time  is  the  owner  of  any  debentures 
shall  be  conclusive  and  binding  upon  all  future  owners  of 
the  same  debentures. 

The  Trustee  shall  be  under  no  obligation  to  see  to  any 
recording,  registry  or  filing  of  this  Agreement. 

The  Trustee  shall  incur  no  liability  to  anybody  in 
acting  upon  any  notice,  request,  opinion,  consent,  certifi¬ 
cate,  debenture,  document  or  paper  believed  by  it  to  be 
genuine  and  to  have  been  signed  or  presented  by  the 
proper  persons. 

As  to  the  existence  or  non-existence  of  any  fact  or  as 
to  the  sufficiency  or  validity  of  any  instrument,  paper 
or  proceeding,  the  Trustee  shall  be  entitled  to  rely  upon 
a  certificate  of  the  Company  signed  by  its  President  or 


32 


a  Vice-President  and  by  its  Secretary  or  an  Assistant 
Secretary,  as  sufficient  evidence  of  the  facts  therein 
contained,  unless  other  evidence  is  specifically  re¬ 
quired  herein.  The  Trustee  may  receive  a  certificate 
under  the  corporate  seal  of  the  Company  and  signed  by 
the  Secretary  or  an  Assistant  Secretary  of  the  Company 
as  sufficient  evidence  of  the  due  adoption  of  any  resolu¬ 
tion  by  the  Board  of  Directors  of  the  Company.  The 
Trustee  may  rely  upon,  and  shall  incur  no  liability  for 
any  action  taken  by  it  in  reliance  upon  any  such  resolu¬ 
tion  so  certified. 

The  Trustee  shall  be  reimbursed  by  the  Company  upon 
demand  for,  and  be  indemnified  against,  any  liability  or 
damages  which  may  be  sustained  by  it  in  the  premises. 
The  Trustee  shall  have  a  claim  prior  to  that  of  any  deben¬ 
ture  issued  hereunder  for  its  compensation  and  expenses, 
and  also  for  any  liability  or  damage  by  it  sustained  in  the 
premises. 

The  Trustee  makes  no  undertaking  in  respect  of,  and 
shall  not  be  responsible  in  any  manner  whatsoever  for, 
the  validity  or  execution  of  this  Agreement  or  of  any  of 
the  debentures  issued  hereunder  or  the  recitals  herein 
or  in  said  debentures  contained,  all  such  recitals  being 
made  and  to  be  taken  as  statements  of  the  Company 
solely;  nor  shall  the  Trustee  be  accountable  for  the  use 
of  any  debentures  authenticated  and  delivered  hereunder, 
or  for  the  application  of  the  proceeds  of  such  debentures, 
or  for  the  performance  of  any  covenant,  agreement  or 
condition  herein  on  the  part  of  the  Company.  The  Trustee 
may  advise  with  counsel,  and  any  action  taken  or  suffered 
under  this  Agreement  in  good  faith  by  the  Trustee,  in 
accordance  with  the  opinion  of  counsel,  shall  be  conclu¬ 
sive  on  the  Company  and  on  all  holders  of  any  of  the 
debentures  issued  hereunder,  so  that  the  Trustee  shall  be 
fully  protected  in  respect  to  any  such  action. 


33 


Anyone  holding  the  office  of  Trustee  hereunder  may 
from  time  to  time  purchase,  acquire,  hold,  own  and  deal 
in  any  of  the  debentures  issuable  hereunder,  and  assert  its 
rights  in  respect  thereof  in  the  same  manner  as  any  other 
debenture  holder  hereunder. 

Any  moneys  received  by  the  Trustee  under  any  pro¬ 
vision  of  this  Agreement,  may  be  treated  by  it,  until  it  is 
required  to  pay  out  the  same  conformably  herewith,  as  a 
general  deposit,  without  any  liability  for  interest,  save 
such  as  during  that  period  it  may  agree  with  the  Company 
to  pay  thereon,  or  shall  allow  to  its  general  depositors. 

The  Trustee  shall  be  entitled  to  reasonable  compensa¬ 
tion  for  all  services  rendered  by  it  in  the  execution  of 
the  trust  hereby  created,  including  reasonable  counsel 
fees  for  the  services  of  counsel  in  connection  with  the 
execution  of  such  trusts,  and  the  Company  hereby  agrees 
to  pay  such  compensation,  as  well  as  all  expenses  neces¬ 
sarily  incurred  or  disbursed  by  the  Trustee  hereunder. 
In  case  of  non-payment  of  any  such  compensation  or  ex¬ 
penses,  the  amount  unpaid  shall  be  a  claim  against  the 
Company  and  a  lien  upon  any  moneys  collected  under 
this  Agreement  prior  to  the  debentures  issued  hereunder. 
The  compensation  of  the  Trustee  shall  not  be  limited  by 
any  provision  of  law  in  regard  to  the  compensation  of  a 
trustee  of  an  express  trust. 

Section  34.  Any  company  into  which  the  Trustee  may 
be  merged,  or  with  which  it  may  be  consolidated,  or  any 
company  resulting  from  any  merger  or  consolidation  to 
which  the  Trustee  shall  be  a  party,  shall  be  the  successor 
of  the  Trustee  hereunder,  without  the  execution  or  filing 
of  any  paper  or  any  further  action  on  the  part  of  any  of 
the  parties  hereto,  anything  herein  to  the  contrary  not¬ 
withstanding.  In  case  any  of  the  debentures  issued  here¬ 
under  shall  have  been  authenticated  but  not  delivered, 
then  the  successor  trustee  may  adopt  the  certificate  of 


34 


authentication  of  the  Guaranty  Trust  Company  of  New 
York  anti  deliver  the  same  so  authenticated;  and  in  case 
any  of  such  debentures  shall  not  have  been  authenticated, 
the  successor  trustee  may  authenticate  such  debentures 
by  the  proper  officer  of  the  successor  trustee;  and  in  all 
such  cases  such  certificate  shall  have  the  full  force 
which  it  is  anywhere  in  the  debentures  or  in  this  Agree¬ 
ment  provided  that  the  certificate  of  the  original  Trus¬ 
tee  shall  have. 

Section  35.  The  Trustee  or  any  trustee  or  trustees 
hereafter  appointed,  may  resign  the  trust  hereby  created 
and  become  and  remain  fully  discharged  from  all  further 
duty  or  responsibility  thereunder,  upon  giving  thirty  days’ 
notice  in  writing  to  the  Company  or  any  officer  thereof, 
or  such  shorter  notice  as  the  Company  may  accept  as 
sufficient,  in  which  notice  there  shall  be  stated  a  date 
when  such  resignation  shall  take  effect;  and  such  resigna¬ 
tion  shall  take  effect  on  the  day  specified  in  said  notice 
unless  previously  a  successor  trustee  shall  be  appointed, 
as  hereinafter  provided,  in  which  event  such  resignation 
shall  take  effect  immediately  upon  the  appointment  of 
such  successor  trustee.  The  Trustee  may  be  removed  from 
office  at  any  time  by  an  instrument  in  writing  under  the 
hands  of  the  holders  of  a  majority  in  principal  amount  of 
the  debentures  issued  hereunder  and  then  outstanding, 
subject  to  the  right  of  the  Trustee  to  receive  reasonable 
compensation  and  repayment  of  all  costs,  charges  and 
expenses  incurred. 

Section  36.  In  case  the  Trustee  shall  resign  or  be 
removed,  or  otherwise  become  incapable  of  acting  here¬ 
under,  or  in  case  the  Trustee  shall  be  taken  under  the 
control  of  any  public  officer  or  of  a  receiver  appointed  by 
a  court,  the  Company  shall  nominate  and  appoint  a  new 
trustee  in  its  place  and  stead.  The  Trustee  so  appointed 


35 


shall  always  be  a  trust  company  or  national  bank  in  good 
standing,  with  its  principal  office  in  the  Borough  of  Man¬ 
hattan,  City  of  New  York.  Said  appointment  by  the 
Company  shall  be  attested  by  the  certificate  in  writing  of 
the  President  or  a  Vice-President  and  the  Secretary  or  an 
Assistant  Secretary  of  the  Company,  under  its  corporate 
seal,  and  the  written  acceptance  thereof  by  the  Trustee 
so  appointed,  and  the  Trustee  so  appointed  shall  have 
the  like  powers  and  be  subject  to  the  same  conditions  as 
herein  provided. 

Immediately  upon  such  appointment  the  Company  shall 
give  notice  thereof  by  publication  in  at  least  one  newspaper 
published  in  the  Borough  of  Manhattan,  City  of  New  York 
and  in  one  newspaper  published  in  the  City  of  Toronto, 
Ontario,  once  a  week  for  at  least  four  weeks.  Within  ninety 
days  after  the  commencement  of  such  publication  the 
holders  of  a  majority  in  principal  amount  of  the  de¬ 
bentures  issued  hereunder  and  then  outstanding  shall 
have  power  to  nominate  and  appoint,  by  an  instrument  in 
writing,  signed  by  such  majority,  another  Trustee  in  the 
place  and  stead  of  the  one  so  appointed  by  the  Company. 
The  Trustee  so  appointed  shall  always  be  a  trust  company 
or  national  bank  in  good  standing,  with  its  principal  office 
in  the  Borough  of  Manhattan,  City  of  New  York.  The 
Trustee  so  appointed,  upon  written  acceptance,  shall  have 
the  like  powers  and  be  subject  to  the  same  conditions  as 
hereinabove  provided.  If  such  holders  of  a  majority  in 
principal  amount  of  the  debentures  issued  hereunder  and 
then  outstanding  shall  not  within  said  ninety  days  make 
such  nomination  and  appointment  and  procure  the  ac¬ 
ceptance  thereof  by  the  Trustee  so  appointed  by  them, 
then  the  Trustee  so  nominated  and  appointed  by  the 
Company  shall  continue  to  act  as,  and  be  the  Trustee 
hereunder. 

Any  such  new  Trustee  appointed  hereunder  shall  exe¬ 
cute,  acknowledge  and  deliver  to  the  Company  an  instru¬ 
ment  accepting  such  appointment  hereunder,  and  there- 


36 


upon  such  successor  Trustee  without  any  further  act,  deed 
or  conveyance,  shall  become  vested  with  all  the  rights, 
powers,  trusts,  duties  and  obligations  of  its  predecessor 
in  the  trust  hereunder,  with  like  effect,  as  if  originally 
named  as  Trustee  hereunder;  but,  nevertheless,  on  the 
written  request  of  the  Company  or  of  the  successor  Trus¬ 
tee,  the  Trustee  ceasing  to  act  shall  execute  and  deliver  an 
instrument  transferring  to  such  successor  Trustee  upou 
the  trusts  herein  expressed,  all  the  rights,  powers  and 
trusts  of  the  Trustee  so  ceasing  to  act.  Upon  request  of 
any  such  successor  Trustee,  the  Company  shall  make,  exe¬ 
cute,  acknowledge  and  deliver  any  and  all  instruments  in 
writing  for  more  fully  and  certainly  vesting  in  and  con¬ 
firming  to  such  successor  Trustee,  all  such  rights,  powers 
and  duties. 

Section  37.  If  at  any  time  or  times,  in  order  to  con-  • 
form  to  any  legal  requirement  of  the  Dominion  of  Canada 
or  of  any  province  or  any  other  governmental  sub  division 
thereof,  the  Trustee  shall  so  request,  the  Company  and 
the  Trustee  shall  unite  in  the  execution  and  performance 
of  all  instruments  and  agreements  necessary  or  proper 
to  appoint  another  bank  or  trust  company  or  one  or  more 
persons,  approved  by  the  Trustee,  either  to  act  as  co- 
trustee  or  co-trustees  hereunder,  jointly  with  the  Trustee, 
or  to  act  as  separate  trustee  or  trustees  in  a  particular 
capacity;  and  any  such  trustee  or  trustees  may  be  re¬ 
moved  by  the  Company  and  the  Trustee  at  any  time  by 
instrument  in  writing  executed  by  them  jointly.  The 
Company  hereby  irrevocably  appoints  the  Trustee  its 
agent  at  any  future  time  or  times  and  without  any  fur¬ 
ther  act  by  the  Company  (whenever  the  Company  shall 
not  join  with  it  in  any  such  appointment  within  twenty 
days  after  written  request  by  the  Trustee  so  to  do)  to 
appoint  any  such  trustee  or  co-trustee  and  to  execute, 
deliver  and  perform  any  and  all  instruments  and  agree- 


37 


ments  necessary  or  proper  in  connection  with  the  fore¬ 
going. 


ARTICLE  EIGHT. 

Consolidation,  Merger  and  Sale. 

Section  38.  Nothing  contained  in  this  Agreement  or 
in  any  debenture  hereby  secured  shall  prevent  any  con¬ 
solidation  or  merger  of  the  Company  with  any  other 
corporation,  or  shall  prevent  any  sale,  conveyance  or 
transfer  of  the  property  of  the  Company  as  an  entirety 
to  any  other  corporation ;  pro  ruled,  however,  that  no  such 
consolidation,  merger,  sale,  conveyance  or  transfer  shall 
impair  the  benefit  and  security  of  this  Agreement  or  any 
of  the  rights  or  powers  hereunder  of  the  Trustee  or  of  the 
holders  of  debentures  hereby  secured,  and  provided 
further  that  upon  any  such  consolidation,  merger,  sale, 
conveyance  or  transfer,  the  due  and  punctual  payment  of 
the  principal  and  interest  of  all  of  the  debentures,  accord¬ 
ing  to  their  tenor,  and  the  due  and  punctual  perform¬ 
ance  and  observance  of  all  of  the  covenants  and  condi¬ 
tions  of  this  Agreement,  shall  be  expressly  assumed  by 
the  corporation  formed  by  any  such  consolidation  or 
merger  or  acquiring  the  property  of  the  Company  as 
an  entirety. 

Section  39.  In  case  of  any  such  consolidation  or 
merger  of  the  Company  witli  any  other  corporation,  or 
in  case  of  any  such  sale,  conveyance  or  transfer,  and 
in  case  the  successor  corporation  shall  have  assumed, 
by  instrument  in  writing  delivered  to  the  Trustee,  the 
due  and  punctual  payment  of  the  principal  and  interest 
of  all  the  debentures  and  the  due  and  punctual  per¬ 
formance  and  observance  of  all  the  covenants  and 
conditions  of  this  Agreement,  such  successor  corporation 
shall  succeed  to  and  be  substituted  for  the  Company  with 


38 


the  same  effect  as  if  it  had  been  named  herein  as  such 
party  of  the  first  part;  and  upon  the  order  of  such  suc¬ 
cessor  corporation,  instead  of  the  Company,  and  subject 
to  all  the  terms,  conditions  and  limitations  of  this  Agree¬ 
ment  the  Trustee  shall  authenticate  and  deliver  any  such 
of  the  debentures  as  previously  shall  have  been  signed  and 
delivered  by  the  Company  to  the  Trustee  for  authentica¬ 
tion  and  any  such  of  the  debentures  as  thereafter  shall  be 
signed  and  delivered  to  the  Trustee  for  that  purpose. 
And  such  successor  corporation  may  cause  to  be  signed 
and  issued,  either  in  its  own  name  or  in  the  name  of  the 
Company,  any  and  all  debentures  thereafter  to  be  issued 
hereunder  which  theretofore  shall  not  have  been  signed  by 
the  Company  and  delivered  to  the  Trustee.  All  of  the 
debentures  so  issued  shall  have  in  all  respects  the  same 
benefit  of  this  Agreement  as  debentures  theretofore  or 
thereafter  issued  in  accordance  with  the  terms  of  this 
Agreement,  as  though  all  of  said  debentures  had  been 
issued  at  the  date  of  the  execution  hereof.  The  Trustee 
shall  be  under  no  duty  to  see  that  such  successor  corpo¬ 
ration  shall  assume  the  payment  of  the  debentures  issued 
hereunder  or  the  performance  of  the  covenants  or  con¬ 
ditions  hereof,  except  as  a  condition  precedent  to  the 
vesting  in  such  successor  corporation  of  the  rights  and 
powers  of  the  Company  conferred  by  this  Agreement. 

The  Trustee  shall  be  protected  in  acting  hereunder 
upon  the  receipt  of  an  opinion  of  counsel  approved  by  it 
(who  fhay  be  counsel  to  the  Company)  that  any  such 
proposed  consolidation,  merger,  sale,  conveyance  or 
transfer  complies  with  the  provisions  of  this  Section. 

ARTICLE  NINE. 

Discharge  of  Agreement. 

Section  10.  If,  when  all  the  debentures  issued  here¬ 
under  shall  have  become  due  and  payable,  the  Company 
shall  well  and  truly  pay  or  cause  to  be  paid  the  whole 


39 


amount  of  the  principal  moneys  (and  premiums  if  any), 
and  interest  due  upon  all  the  debentures  or  shall  provide 
for  such  payment  by  depositing  with  the  Trustee  for  the 
payment  of  the  debentures  and  coupons  the  entire  amount 
then  due  thereon  for  principal  (and  premiums  if  any) 
and  interest,  and  shall  also  pay  or  cause  to  be  paid  all 
other  sums  payable  hereunder  by  the  Company  and  shall 
well  and  truly  keep  and  perform  all  the  things  required 
to  be  kept  and  performed  by  it,  according  to  the  true 
intent  and  meaning  of  this  Agreement,  then  and  in  that 
case  this  Agreement  shall  cease  to  be  of  further  effect, 
and  the  Trustee  on  demand  and  at  the  cost  and  expense 
of  the  Company  shall  execute  proper  instruments 
acknowledging  satisfaction  of,  and  discharging  this 
Agreement. 


ARTICLE  TEN. 

Miscellaneous. 

Section  41.  All  the  covenants,  stipulations,  promises 
and  agreements  in  this  Agreement  contained,  by  or  on 
behalf  of  the  Company,  shall  bind  its  successors  and 
assigns,  whether  so  expressed  or  not,  and  are  for  the 
common  and  equal  use,  benefit  and  security  of  all  and 
singular  the  present  and  future  holders  or  owners  of 
debentures  issued  hereunder,  or  of  any  of  them,  without 
preference,  priority  or  distinction  of  any  of  the  deben¬ 
tures  over  any  of  the  others  by  reason  of  priority  in 
the  issue,  sale  or  negotiation  thereof,  or  otherwise. 

Section  42.  Nothing  expressed  or  mentioned  in  or  to 
be  implied  from  this  Agreement,  or  in  or  from  the  deben¬ 
tures  issued  hereunder,  is  intended  or  shall  be  construed 
to  give  to  any  person,  firm  or  corporation,  other  than  the 
parties  hereto  and  the  holders  of  the  debentures  hereby  se- 


40 


cured,  any  legal  or  equitable  right,  remedy  or  claim  under 
or  in  respect  of  this  Agreement,  or  under  any  covenant, 
condition  or  provision  herein  contained;  this  Agreement 
and  all  the  covenants,  conditions  and  provisions  hereof 
being  intended  to  be  and  being  for  the  sole  and  exclusive 
benefit  of  the  parties  hereto  and  the  holders  of  the  deben¬ 
tures,  as  herein  provided. 

Section  43.  The  word  “Trustee”  when  and  as  used  in 
these  Presents  shall  for  all  purposes  be  taken  to  mean, 
include  and  describe  the  corporation  or  corporations  or 
the  person  or  persons  who  shall  for  the  time  being  and 
from  time  to  time  be  charged  with  the  execution  of  the 
trusts  herein  and  hereby  expressed  and  created,  whether 
the  same  be  the  party  of  the  second  part  or  any  successor 
or  successors  in  the  said  Trust  howsoever  chosen  or  ap¬ 
pointed  and  their  heirs,  executors,  administrators,  suc¬ 
cessors  or  assigns.  Unless  the  context  recognizes  a  dif¬ 
ferent  interpretation  the  word  “Company”  wherever  used 
in  these  premises  shall  be  taken  to  mean  the  party  of  the 
first  part  and  its  successors  and  assigns. 

This  Agreement  has  been  executed  in  several  counter¬ 
parts,  each  of  which  shall  be  an  original,  and  all  col¬ 
lectively  but  one  instrument. 

In  witness  whereof,  Canadian  General  Electric 
Company,  Limited,  party  of  the  first  part,  has  caused 
this  Agreement  to  be  signed  by  its  President  or  a  Vice- 
President,  and  its  Secretary  or  an  Assistant  Secretary, 
and  its  corporate  seal  to  be  hereunto  affixed;  and 
Guaranty  Trust  Company  of  New  York,  party  of  the 
second  part,  in  evidence  of  its  acceptance  of  the  trusts 
hereby  created,  has  caused  this  Agreement  to  be  signed 
by  a  Vice-President,  and  its  corporate  seal  to  be  hereunto 


41 


affixed  and  attested  by  an  Assistant  Secretary,  all  as  of 
this  day  and  year  first  above  written. 


Canadian  General  Electric  Company, 
Limited, 

[corporate  seal]  A.  E.  Dyment 

President. 


Witnesses  as  to 

Canadian  General  Electric 
Company,  Limited : 


W.  H.  Nesbitt 
Secretary. 


W.  G.  Temant 
A.  C.  B.  Verney 


Guaranty  Trust  Company  of  New  York, 

by  F.  J.  H.  Sutton 
[corporate  seal]  Vice-President. 

Attest : 

H.  D.  Quinby 

Assistant  Secretary. 

Witnesses  as  to 

Guaranty  Trust  Company  of 
New  York : 

John  A.  Lyon 
H.  L.  Keeler 


42 


Dominion  of  Canada, 1 
Province  of  Ontario,  Lss. : 

County  of  York,  J 

I,  A.  M.  Stewart,  a  Notary  Public  for  the  said  Prov¬ 
ince,  do  hereby  certify  that  on  this  26th  day  of  April, 
1922,  before  me  in  the  said  County  personally  appeared 
A.  E.  Dyment,  to  me  known  to  be  the  identical  person 
who  subscribed  his  name  to  the  foregoing  instrument  as 
President  of  Canadian  General  Electric  Company,  Lim¬ 
ited,  and  W.  H.  Nesbitt,  to  me  known  to  be  the  identical 
person  who  subscribed  his  name  to  the  foregoing  instru¬ 
ment  as  Secretary  of  said  Canadian  General  Electric 
Company,  Limited,  and  who,  being  by  me  first  duly  sworn, 
did  depose  and  say  that  they  reside  at  Toronto,  in  the 
Province  of  Ontario,  Canada;  that  they  are  respec¬ 
tively  the  President  and  the  Secretary  of  said  Canadian 
General  Electric  Company,  Limited,  one  of  the  corpora¬ 
tions  described  in  and  which  executed  the  above  instru¬ 
ment  ;  and  that  they  were  authorized  by  said  corporation 
to  execute  and  acknowledge  deeds,  instruments  and  other 
writings  of  said  corporation ;  that  they  know  the  seal  of 
said  corporation ;  that  the  seal  affixed  to  said  instrument 
is  the  corporate  seal  of  said  corporation ;  that  it  was  so 
affixed  by  order  and  authority  of  the  Board  of  Directors 
of  said  corporation,  and  that  they  signed  their  respective 
names  thereto  by  like  order  and  authority;  and  they 
acknowledged  the  said  instrument  to  be  their  free  and 
voluntary  act  and  deed  and  the  free  and  voluntary  act  and 
deed  of  such  corporation  for  the  uses  and  purposes  therein 
set  forth. 

[seal]  A.  M.  Stewart 

Notary  Public 


State  of  New  York,) 
County  of  New  York,Q‘“ 


43 


John  A.  Lyon,  a  Notary  Public  of  the  State  and  County 
of  New  York,  do  hereby  certify  that  on  this  25th  day  of 
April,  1922,  before  me  in  the  said  County  and  State  per¬ 
sonally  appeared  F.  J.  II.  Sutton,  to  me  known  to  be  the 
identical  person  who  subscribed  his  name  to  the  fore¬ 
going  instrument  as  Vice  President  of  Guaranty  Trust 
Company  of  New  York,  and  II.  D.  Quinby,  to  me 
known  to  be  the  identical  person  who  subscribed  his  name 
to  the  foregoing  instrument  as  Assistant  Secretary  of 
Guaranty  Trust  Company  of  New  York,  and  who,  being 
by  me  duly  sworn,  did  depose  and  say  that  he,  the  said 
F.  J.  H.  Sutton,  resides  at  New  York  in  New  York,  and 
that  he,  the  said  II.  I).  Quinby,  resides  at  New  York, 
in  New  York;  that  they  are  respectively  a  Vice  Presi¬ 
dent  and  an  Assistant  Secretary  of  said  Guaranty 
Trust  Company  of  New  York,  one  of  the  corporations 
described  in  and  which  executed  the  above  instrument, 
and  that  they  were  authorized  by  said  corporation  to 
execute  and  acknowledge  deeds,  instruments  and  other 
writings  of  said  corporation ;  that  they  know  the  seal  of 
said  corporation;  that  the  seal  affixed  to  said  instrument 
is  the  corporate  seal  of  said  corporation ;  that  it  was  so 
affixed  by  order  and  authority  of  the  Board  of  Directors 
of  said  corporation,  and  that  they  signed  their  respective 
names  thereto  by  like  order  and  authority;  and  they 
acknowledged  the  said  instrument  to  be  their  free  and 
voluntary  act  and  deed  and  the  free  and  voluntary  act  and 
deed  of  such  corporation  for  the  uses  and  purposes  therein 
set  forth. 

John  A.  Lyon 

Notary  Public 

[seal]  Bronx  Co.  Clk.’s  No.  60  Reg.  No.  47 

N.  Y.  Co.  Clk.’s  No.  235  Reg.  No.  3219 
Commission  expires  March  30,  1923 


K365: 


3  0112  105646654 


